Synthesis Energy Systems Achieves First Methanol Production from Yima Joint Venture Project

 Synthesis Energy Systems Achieves First Methanol Production from Yima Joint
                               Venture Project

Production milestone sets stage for SES to achieve sustainable financial
results in China

PR Newswire

HOUSTON, Jan. 7, 2013

HOUSTON, Jan. 7, 2013 /PRNewswire/ --Synthesis Energy Systems, Inc. (NASDAQ:
SYMX) ("SES") announces that the Yima Joint Venture plant has started to
produce methanol, moving the Company closer to generating meaningful financial
results from its China business in 2013.

The plant will be ramping up methanol production to full capacity as the Yima
Joint Venture completes all remaining commissioning and start-up steps
throughout the first half of 2013.

Located in Henan Province, China, the state-of-the-art, $250 million
coal-to-methanol facility uses SES' patented and proprietary gasification
technologies. It has been constructed through a 75/25 percent owned joint
venture between Yima Coal Industry Group Co. Ltd., a large, integrated Chinese
coal company, and SES, respectively. When it reaches full capacity later this
year, the plant is expected to cleanly convert some 2,400 tonnes per day of
high ash Yima coal into 300,000 tonnes per year of refined methanol. There is
a large and growing market for refined methanol in China as the demand for
non-traditional utilization of methanol for production of olefins and
transportation fuels is rapidly increasing in the country.

"We are pleased our Yima JV generated the first methanol production by the end
of 2012, as planned. This project represents a significant accomplishment for
SES and is expected to generate meaningful cash flows for the Company. We
expect the Yima Joint Venture to quickly ramp up methanol production rates and
sales this year in order to achieve sustainable full capacity production
levels," said Robert Rigdon, president and CEO, SES.

"The Yima project is being carefully monitored by other potential partners and
customers of SES. We believe the production of methanol will be a major
catalyst for further commercialization of our technology and enable us to
realize the value of the significant pipeline of Chinese and global
opportunities we have built over the past three years while this project has
been under construction," said Mr. Rigdon.

History of Yima Joint Venture Project

In August 2009, SES and Yima entered into amended joint venture contracts for
the gasification, methanol/methanol protein production and utility island
components of the plant, collectively referred to as the Yima Joint Ventures.
Government approvals were received and detailed design engineering and
construction of the plant began in 2009.

The project is phase one of the Maozhuang Industrial Park - a planned $4B USD
industrial park in Henan Province, China. This phase one project is a $250
million integrated coal-to-methanol plant, with facilities to develop
production of methanol protein. When phase one is completed, the plant is
expected to produce a minimum of 300,000 tonnes of refined methanol annually.

Two additional phases of coal gasification projects are planned to start at
this location upon successful completion of the phase one plant. Phase two is
expected to add additional capacity of 300,000 tonnes per annum of refined
methanol or methanol equivalent products, and phase three is expected to add
additional capacity of 600,000 tonnes per annum of refined methanol or
methanol equivalent products. These three phases together make up
approximately 50 percent of the planned investment at the Maozhuang Industrial
park.

Photographs and an artist's rendering of the Yima Joint Venture Project in
China are available upon request.

SES' Advanced Gasification Technology

SES has the only commercially available gasification technology proven to
economically process the lowest quality coal feed stocks, which represent
approximately 50 percent of total recoverable global coal reserves. The
company has developed significant intellectual property protecting its
advanced fluidized bed gasification technology, which is based upon the U-GAS®
fluidized bed gasification technology licensed exclusively from the Gas
Technology Institute. Its primary advantages, relative to other gasification
technologies, are much greater fuel flexibility provided by the ability to use
all types of coal and many coal waste products as well as renewable biomass
and municipal waste feed stocks. These feed stocks which include low quality,
high ash and high moisture coals are available and significantly cheaper than
higher grade coals. The technology cleanly converts these feedstocks into
synthesis gas (syngas) in a cost effective and environmentally friendly
manner. It has low water consumption and does not produce any harmful
byproducts. The technology can be modularized and installed on a small scale
or large scale enabling the rapid construction of plants at a lower capital
cost, and in many cases, in closer proximity to coal sources.

About Synthesis Energy Systems, Inc.

SES provides technology, equipment and engineering services for the conversion
of low rank, low cost coal and biomass feedstocks into energy and chemical
products. Its strategy is to create value through providing technology and
equipment in regions where low rank coals and biomass feedstocks can be
profitably converted into high value products through its proprietary U-GAS^®
fluidized bed gasification technology, which SES licenses from the Gas
Technology Institute. U-GAS^® gasifies coal cost effectively, without many of
the harmful emissions normally associated with coal combustion plants. The
primary advantages of U-GAS^® relative to other gasification technologies are
(a) greater fuel flexibility provided by the ability of SES to use all ranks
of coal (including low rank, high ash and high moisture coals, which are
significantly cheaper than higher grade coals), many coal waste products and
biomass feed stocks; and (b) the ability of SES to operate efficiently on a
smaller scale, which enables the construction of plants more quickly, at a
lower capital cost, and, in many cases, in closer proximity to coal sources.
SES currently has offices in Houston, Texas, and Shanghai, China. For more
information on SES, please visit www.synthesisenergy.com or call (713)
579-0600.

SES Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical fact are forward-looking statements. Forward-looking
statements are subject to certain risks, trends and uncertainties that could
cause actual results to differ materially from those projected. Among those
risks, trends and uncertainties are the early stage of development of SES, its
estimate of the sufficiency of existing capital sources, its ability to
successfully develop its licensing business, its ability to raise additional
capital to fund cash requirements for future investments and operations
including its China platform initiative, its ability to reduce operating
costs, the limited history and viability of its technology, commodity prices
and the availability and terms of financing opportunities, its results of
operations in foreign countries, its ability to diversify, its ability to
complete the restructuring of the ZZ Joint Venture, its ability to obtain the
necessary approvals and permits for its future projects, the estimated
timetables for achieving mechanical completion and commencing commercial
operations for the Yima project as well as the ability of the Yima project to
produce revenues and earnings, the sufficiency of internal controls and
procedures, its ability to effect the proposed ZJX/China Energy transaction
based on its ongoing discussions with ZJX and China Energy, its ability to
grow its business and generate revenues and earnings as a result of its
proposed China and India platform initiatives and its relationship with
Crystal Vision Energy, as well as its joint venture with Midas Resource
Partners. Although SES believes that in making such forward-looking statements
its expectations are based upon reasonable assumptions, such statements may be
influenced by factors that could cause actual outcomes and results to be
materially different from those projected. SES cannot assure you that the
assumptions upon which these statements are based will prove to have been
correct.

Important Notice from SES

In connection with the proposed ZJX/China Energy transaction, SES has filed a
preliminary proxy statement, and intends to file a definitive proxy statement,
with the SEC and intends to mail the definitive proxy statement to the
stockholders of SES. SES and its directors and officers may be deemed to be
participants in the solicitation of proxies from the stockholders of SES in
connection with the transaction. Information about the transaction is set
forth in the preliminary proxy statement filed, and will be set forth in the
definitive proxy statement to be filed by SES with the SEC.

You may obtain the preliminary statement and, when available, the definitive
proxy statement, for free by visiting EDGAR on the SEC website at www.sec.gov.
Investors should read the definitive proxy statement carefully before making
any voting or investment decision because that document will contain important
information.

SOURCE Synthesis Energy Systems, Inc.

Website: http://www.synthesisenergy.com/
Contact: Synthesis Energy Systems, Inc., Kevin Kelly, Chief Accounting
Officer, +1-713-579-0600, Kevin.Kelly@synthesisenergy.com, MBS Value Partners,
LLC (Investors), Matthew D. Haines, Managing Director, +1-212-710-9686,
Matt.Haines@mbsvalue.com, Feintuch Communications (Media), Emily Simmons,
Account Executive, +1-212-808-4904, SES@feintuchpr.com
 
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